Question

Territory and Product Profitability Analysis

Zen Skateboards, Inc., manufactures and sells two styles of skateboards, Street Machine and Winter Warrior. These skateboards are sold in two regions, Southern Coast and Northern Coast. Information about the two skateboards is as follows:

	Street Machine		Winter Warrior
Sales price	$400		$350
Variable cost of goods sold per unit	148		161
Manufacturing margin per unit	$252		$189
Variable selling expense per unit	156		105
Contribution margin per unit	$96		$84

The sales unit volume for the territories and products for the period is as follows:

	Southern Coast		Northern Coast
Street Machine	2,820		1,410
Winter Warrior	0		1,410

Prepare a contribution margin by sales territory report. Calculate the contribution margin ratio for each territory as a whole percent, rounded to two decimal places, if required.

Zen Skateboards, Inc.
Contribution Margin by Territory
	Southern Coast	Northern Coast
	$	$
	$	$
	$	$
Contribution margin ratio	%	%

Answer 1